Failures in Functional Foods & Beverages

And what they reveal about success

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ISBN: 978-1-906297-26-8	Publication date: May 2009
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About this report

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The functional foods market is a tough one. Success with a new product or ingredient in this harsh and demanding market is very rare.  In fact, failure is far more common than success and most products sell on a niche basis with very few ever graduating into the mass market.

This unique 98-page report examines brands and ingredients that have either been withdrawn from market or have not performed as well as expected. It sets out the lessons that can be applied by anyone trying to develop an effective strategy for a brand or trying to commercialise nutrition science.

The categories covered in this report are:

• Dairy drinks and yoghurts
• Breakfast cereals
• Water
• Juice drinks
• Soy drinks

The health benefit platforms covered include:

• Weight management (satiety and calorie-burning)
• Heart health (cholesterol-lowering, blood pressure-lowering)
• Bone health
• Joint health
• Beauty and skin
• Energy
• Digestive health
• Brain and eye development

Ingredients featured include:

• Probiotics
• Prebiotics
• Fibre
• Wholegrains
• Plant sterols and stanols
• Green tea
• Omega-3
• CoEnzyme Q10
• Protein
• Soy
• Calcium
• Glucosamine
• Antioxidants

The report is in two parts. Part I is a concise 40-page analysis setting out:

• Which brand strategies are most effective and why
• Which ingredient strategies are most effective and why

Part II consists of 15 detailed case studies which summarise:

• success factors, and common causes of failure
• common lessons for pricing, positioning and marketing
• key lessons in selecting ingredients
• key lessons in communicating benefits
• how to extend an existing brand
• how to create a successful new brand

Each case study is based on interviews with executives at the companies concerned. They speak with considerable frankness about challenges they have encountered.  We have set their opinions in the context of our own analysis – which means that we do not always agree with some companies’ self-analysis – to create a template that will be useful to anyone trying to develop a new product with health benefits or devise a strategy in health.

Author Julian Mellentin is an acknowledged international expert on the business of food, nutrition and health – and his insights have been derived from 15 years of dedicated research in the area.

Contents

Introduction: About this new edition
         Functional foods definition
         What do we mean by failure?

Executive summary

Part I: Rules for success

The Seven Golden Rules for success in functional foods and beverages
         First, get the basics right
Rule 1: Successful brands are expert brands
Rule 2: Offer a relevant benefit and be a credible brand
         Offer a credible brand
Rule 3: Aim for a benefit the consumer can feel
         In hard times products without immediate benefits could see sales fall
         A bright future for satiety and sports?
         If they can’t feel the benefit – show it to them
         Justifying a premium price in hard times
Rule 4: Remember that an ingredient is not a point of difference
Rule 5: A future of niches – focus on value, not volume
         Focus on premium pricing in your niche
Rule 6: Differentiate using packaging design
Rule 7: Open new categories and segments – don’t be a me-too
         New category creation
         Brand extension or new brand?

Part II: Case studies

Cereals
         1. Novartis Aviva – a “family” of functional foods
         2. Nestlé’s prebiotic breakfast cereal
         3. Quaker Oatmeal Nutrition for Women

Dairy
         4. Unilever pro.activ blood pressure-lowering dairy drink
         5. Danone Essensis beauty foods
         6. Danacol UK – cholesterol-lowering and omega-3
         7. Delamere Dairy – milk & joint health
         8. Emmi Lacto-Tab – energy and CoQ10

Beverages
         9.   Enviga – sales collapse for Coca-Cola’s calorie burner
         10. Naturally Gorgeous – new benefit not enough
         11. Unilever Adez soy protein fruit juice
         12. Minute Maid Heart Wise – a lesson about the crowed world of heart health   
         13. Sirco – heart health puts juice in an ultra-niche
         14. Danone Activ – water & bone health

Market failure
            15. Omega-3 – technology fails to fly as hoped     

About the author

Julian Mellentin is one of the world's few international specialists in the business of food, nutrition and health. Julian is the owner and editor of New Nutrition Business, the leading source of industry and market analysis, which has focused solely on researching and forecasting the nutrition business since 1995.

He is also co-author of The Functional Foods Revolution: Healthy people, healthy profits?, the first-ever book on the business of functional foods, now translated into Japanese, and with Peter Wennström of Commercialising Innovation: The Food & Health Marketing Handbook.

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For help with ordering or for more information e-mail: Miranda.mills@new-nutrition.com

Insights don’t have to cost a fortune

Expertise in the business of food, nutrition and health since 1995